9/07/2010 @ 6:00AM

The Real Value Of 3Par

The bidding war between
Hewlett-Packard
and
Dell
for 3Par is over. HP won. But what did it really win, and for how long?

The answer to that question is much bigger than the role 3Par can play in the future of either
Dell
or HP. 3Par’s technology virtualizes storage, which means capacity can be added or subtracted as needed. It’s interesting stuff, but it’s hardly groundbreaking technology. Both companies are capable of developing their own technology in relatively short order, or buying other companies that can provide similar technology.

The bigger issue is the convergence not just of technology but of entire markets. Virtualization is little more than a slick way of time sharing on servers, something that was started rather crudely in the 1960s and perfected in the 1970s with
IBM
mainframes. In 3Par’s case, the focus is storage servers, which are more efficient than storage-area networks.

What’s new is that convergence in technology typically means that it has matured and it’s time for something new to come along. That convergence is usually triggered by technology advances that make devices smaller, faster and cheaper, as evidenced by the migration from mainframes to minicomputers to PCs and now to mobile devices. In other cases, such as offshoring and outsourcing, it can be triggered by cheaper labor and availability of raw materials.

Rarely, however, is it triggered by entire markets converging on each other and companies reaching across markets. In fact, for the past four decades the trend has been solidly toward disaggregation of markets involving computing and storage. That seemed to work fine until storage grew beyond the point where anyone could manage it.

The sheer amount of data that companies are dealing with now is a huge problem for all companies in all markets. Everything has been digitized, including documents that used to be stored in file cabinets and sometimes microfilm and video, which takes up gigabytes rather than kilobytes of storage space for text. In the 1980s most people didn’t know what came after gigabytes, but chief information officers now routinely talk about petabytes and exabytes. Occasionally you even hear about zettabytes.

Most corporations have taken a two-pronged approach to dealing with this problem. First, they have set up firm retention policies that either eliminate or archive data after a fixed period of time, which may be anything from 90 days for e-mail to as much as seven years for documents. Or they have figured out ways to store it more efficiently so that data can be mined when there is a reason, such as a hospital looking for health and treatment trends.

Second, they have outsourced some aspect of the problem, either internally to a private cloud or externally to companies like Amazon, IBM, Dell, HP,
Microsoft
, Oracle,
EMC
or
Google
, as well as a slew of others that have never played in this world before. If you take a look at those names, you start to see the shift. The boundaries between the sellers of hardware, software, networking equipment and even books are now converging on the same problem with roughly the same approach.

For all of them, data management or consulting about how to better manage or mine data has become a core competency. They deal with it every day. Data has become a global issue, not just a problem that can be dealt with by IT equipment vendors.

That shift is prompting a wholesale change in how the battle lines are being drawn. Dell has been fighting HP in the server market, and both have been fighting encroachment by
Cisco
and now Oracle, which are offering cross-market bundles. But they’re all now fighting Google and Amazon. There are even cross-country bundles and a number of new players from places like Asia and Eastern Europe. Perhaps even more daunting, all of them are now facing a customer base that includes cloud-based companies with enormous buying power and lots of competitors to play off against each other, which will only drive these vendors further afield into each other’s core markets.

The bidding war over 3Par was simply a way of adding one more weapon into the armory for HP and Dell. It will hardly be the last, and any advantage that HP may have reaped will almost certainly be short lived. There are still more acquisitions to be made, and many more billions of dollars to be spent from the cash these companies have stockpiled, before this arms race begins to run out of steam.

Ed Sperling is the editor of several technology trade publications and has covered technology for more than 20 years. Contact him at esperlin@yahoo.com.